Expatriates Are China's Golden Geese

Tycoons Throughout Asia Helping Beijing

HONG KONG — For centuries, the Chinese populations scattered throughout Southeast Asia were a people without a country, persecuted abroad and reviled at home. Now their time has come.

The investments of ethnic Chinese elite from Singapore to Hong Kong to Jakarta to Taiwan are fueling the economic explosion of mainland China, helping their ancestral homeland flex its economic and military might across Southeast Asia.

This convergence of China's ascension with the interests of its sons and daughters scattered around the region is the result of forces at work for two decades: China's gradual opening to the outside, and the Asian economic miracle of the 1970s and 1980s, driven in large part by the success of Chinese expatriates.

But despite having fled their homeland themselves, many of them this century in fear of political repression, overseas Chinese investors did not fully capitalize on opportunities back on the mainland until an event that shocked the rest of the world: the 1989 massacre in Beijing's Tienanmen Square.

While the West reacted in horror and threatened to shut down trade after Chinese troops gunned down pro-democracy protesters in Tiananmen, the Chinese in the diaspora of Southeast Asia stepped into the vacuum with massive investments and know-how.

A desperate communist regime, aware that its survival was tied to continued improvements in the standard of living for its more than 1 billion people, welcomed its once-despised overseas cousins with open arms.

The taipans, or Chinese tycoons, of the diaspora were not shackled by the moral confines of Christianity and lofty concepts of human rights. Some of them saw what they still describe as "the Tiananmen incident" as a necessity to restore stability and ensure their funds would not be lost to social unrest.

"For the Chinese, the idea of human rights is quite different: The individual is really secondary to society. So if individuals are mistreated but society is improving as a whole, it can be justified," said Washington Sycip, the Filipino founder and chairman of SGV&Co, Southeast Asia's leading accountancy firm.

"As the front-runners in the investment boom in the early 1990s, the overseas Chinese could get everything cheaper, sometimes even free of charge," remembers Sofyan Wanandi, the Indonesian chairman of the multinational Gemala manufacturing conglomerate.

The results exceeded expectations: An Australian government analysis published in April found Asian investments, mainly from Chinese in Southeast Asia, were responsible for eight out of every 10 dollars of the $167 billion in direct investment that had gushed into China by the end of last year.

The partnership has helped catapult China into the role of global economic giant. And the People's Liberation Army (PLA), modernized by technology from abroad, is today capable of projecting its power across the region, threatening peace off Taiwan and in the South China Sea.

Ethnic Chinese from Taiwan, Hong Kong, Singapore, Thailand, Malaysia, the Philippines, Indonesia and Australia also supplied the entrepreneurial and managerial skills required for China's export-import transactions and the 112,000 joint ventures churning out goods that gave millions of Chinese their first taste of a capitalist lifestyle.

Although ethnic Chinese make up only 7 percent of the population of Southeast Asia, they control an estimated 70 percent of the region's private wealth. Economic analysts believe as much as one-fifth of their liquid wealth has found its way into China.

Residents of Taiwan, whose government is still involved in a de facto war with the mainland and who are prohibited from direct travel, became China's biggest investor.

Hong Kong, concerned about democracy but on the threshold of being turned over to Beijing's sovereignty July 1, runs second. Singapore and Malaysia, both once staunch enemies of the nation they regarded as the region's communist menace, also stepped up their investment in China.

This period, regarded by many as the Golden Age of the Chinese diaspora in the region, is not the first time ethnic Chinese have come to the rescue of their homeland.

Sun Yat Sen's Republican revolution, which toppled the Qing dynasty in 1911, was financed by contributions from overseas Chinese. The diaspora funded the bulk of the wars against Japan. Tens of thousands of Chinese professionals and academics returned to help Mao Tse-tung's fledgling regime after 1949.

This turning back toward the ancestral homeland is a recurrent pattern despite centuries of persecution from the mainland and abroad.